The PNC Financial Services Group (NYSE:PNC) Q4 2025 Earnings call January 16, 2026 09:00 AM ET Company ParticipantsBetsy Graseck - Global Head of Banks and Diversified Finance ResearchGerard Cassidy - Managing DirectorMatt O'Connor - Managing DirectorMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchRob Reilly - EVP and CFOSteven Chubak - Managing DirectorChris McGratty - Managing DirectorEbrahim Poonawala - Managing Director and Head of North American Banks Research (US and Canadian Ban ...

The PNC Financial Services Group (NYSE:PNC) Q4 2025 Earnings call January 16, 2026 09:00 AM ET Company ParticipantsBetsy Graseck - Global Head of Banks and Diversified Finance ResearchGerard Cassidy - Managing DirectorMatt O'Connor - Managing DirectorMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchRob Reilly - EVP and CFOSteven Chubak - Managing DirectorChris McGratty - Managing DirectorEbrahim Poonawala - Managing Director and Head of North American Banks Research (US and Canadian Ban ...

Financial Data and Key Metrics Changes - PNC reported a net income of $7 billion for 2025, translating to $16.59 per share, with a 21% growth in EPS and a 5% operating leverage [3][9] - Total revenue increased by $1.5 billion, or 7%, driven by record net interest income and non-interest income [8][9] - The tangible book value rose to $112.51 per common share, marking a 4% increase linked quarter and an 18% increase year-over-year [5] Business Line Data and Key Metrics Changes - Loan balances averaged $328 billion, up $2 billion, or 1%, linked quarter, primarily driven by higher commercial balances [5][6] - Commercial loans grew by $10 billion, or 5%, while consumer loans declined by $1 billion, or 1% [7][8] - Non-interest income for the full year reached $8.7 billion, an increase of $633 million, or 8%, compared to 2024 [11] Market Data and Key Metrics Changes - Deposit balances averaged $440 billion, an increase of $8 billion, or 2%, with non-interest-bearing balances representing 22% of total average deposits [5][8] - The effective tax rate for the fourth quarter was 12.7%, reflecting favorable resolutions of tax matters [9] Company Strategy and Development Direction - PNC aims to enhance growth through the integration of First Bank, expecting it to contribute approximately $1 per share to 2027 results [4][15] - The company is pursuing a significant investment agenda, including technology initiatives and branch expansions, while maintaining capital flexibility [4][27] - PNC anticipates achieving substantial operational efficiencies from the First Bank acquisition, with a projected internal rate of return of approximately 25% [15] Management's Comments on Operating Environment and Future Outlook - Management expects continued economic growth in 2026, with a projected real GDP growth of approximately 2% and unemployment near 4.5% [16] - The company forecasts full-year average loan growth of approximately 8% and total revenue growth of about 11% for 2026 [16][17] - Management expressed optimism regarding the capital markets outlook, noting increased activity in middle market investments and M&A [41] Other Important Information - PNC returned $1.1 billion of capital to shareholders during the quarter, with common dividends of $676 million and share repurchases of approximately $400 million [5][6] - The company successfully completed the First Bank acquisition, which is expected to enhance its presence in high-growth communities [13][15] Q&A Session Summary Question: Clarification on share repurchase guidance - Management confirmed that the expected quarterly share repurchase pace of $600 million to $700 million is anticipated to continue through 2026 [20] Question: CET1 ratio and ROTCE targets - The CET1 ratio is expected to decrease to around 10.2%-10.3% post-acquisition, with a medium-term ROTCE target projected to be around 18% [21][23] Question: NII momentum for the year - Management indicated that standalone NII growth is expected to be between 7.5%-8%, comfortably above previous guidance [24] Question: Deposit costs outlook - Management expects deposit costs to decrease further, particularly with anticipated Fed rate cuts [25] Question: Investment trajectory in technology and branches - Management highlighted record investment in technology, with a focus on AI and automation to drive efficiencies [27][28] Question: Loan growth assumptions - The company projects approximately 4% loan growth on a standalone basis, with optimism for C&I and stabilization in CRE [51] Question: Capital markets outlook - Management expects capital markets fees to grow in the high single digits, driven by increased M&A activity [40][42]

Financial Performance - Full Year 2025 - Net income reached $7.0 billion, resulting in diluted earnings per share of $16.59[7] - Total revenue increased by 7% year-over-year, driven by record net interest income (NII) and noninterest income[8] - Pretax, pre-provision earnings (PPNR) increased by 15% year-over-year (non-GAAP)[8] - The company achieved 5% positive operating leverage due to well-controlled expenses[8] Balance Sheet and Credit Quality - Total loans averaged $327.9 billion, a 3% increase year-over-year[9] - Total deposits averaged $439.5 billion, a 3% increase year-over-year[9] - The net loan charge-off ratio was 0.20%[8] FirstBank Acquisition - The acquisition of FirstBank closed on January 5, 2026, with a total consideration of $4.2 billion[8, 27] - FirstBank brings $16 billion in total loans and $23 billion in total deposits[28] Outlook for 2026 - Average loans are expected to increase by approximately 8%[31] - Net interest income is projected to increase by around 14%[31] - Total revenue is forecasted to increase by about 11%[31]

Core Viewpoint - PNC Financial Services Group reported record revenue and a 5% positive operating leverage for the fourth quarter of 2025, with net income reaching $2.0 billion and diluted EPS at $4.88. The company also announced an increase in planned share repurchases following the acquisition of FirstBank [1][7]. Financial Performance - Total revenue for Q4 2025 was $6.1 billion, an increase of $156 million, or 3%, compared to Q3 2025, driven by growth in both net interest income (NII) and noninterest income [11][13]. - Net interest income was $3.7 billion, up $83 million, or 2%, from Q3 2025, benefiting from lower funding costs and loan growth [14][11]. - Noninterest income reached $2.34 billion, a 3% increase from Q3 2025, with notable growth in capital markets and advisory fees [16][11]. Balance Sheet Highlights - Average loans increased by $2.0 billion, or 1%, to $327.9 billion, primarily due to growth in commercial loans [21][23]. - Average deposits grew by $7.7 billion, or 2%, to $439.5 billion, driven by both commercial and consumer client accounts [26][11]. - The common equity tier 1 (CET1) capital ratio was estimated at 10.6% as of December 31, 2025, reflecting a strong capital position [28][29]. Credit Quality - Provision for credit losses was $139 million in Q4 2025, down from $167 million in Q3 2025, indicating improved credit quality [35][36]. - Net loan charge-offs were $162 million, a decrease of $17 million compared to Q3 2025, reflecting lower consumer and commercial charge-offs [36][35]. - Total delinquencies increased to $1.4 billion, up 17% from the previous quarter, primarily due to higher commercial and consumer loan delinquencies [38][35]. Acquisition Impact - PNC completed the acquisition of FirstBank on January 5, 2026, which had $26 billion in assets and will be included in PNC's consolidated operations starting Q1 2026 [7][1].

First Quarter 2025 Earnings Conference Call April 15, 2025 Cautionary Statement Regarding Forward-Looking and non-GAAP Financial Information Our earnings conference call presentation is not intended as a full business or financial review and should be viewed in the context of all of the information made available by PNC in its SEC filings and on our corporate website. The presentation contains forward-looking statements regarding our outlook for financial performance, such as earnings, revenues, expenses, t ...